Financial Literacy for Women

An Important Discussion A Couple Needs to Do in the Midst of Corona Crisis

There were 3 deaths people (all the three males) closely known to me, due to COVID 19 in the last 2 months. There are thousands of others who died since the outbreak of the pandemic. The spread is not contained, the threat is persistent, and the vaccine availability is uncertain.

We all are living with the constant fear of death, and hope of surviving this phase of severest human tragedy. When the fear of death looms large, husbands and wives (the couple) must undertake an important and detailed discussion about the family finance.

Usually, wives are ignorant and don’t care about family finance as long as they get the money they want.  This must change.

This is time and an opportunity to say good-bye to ignorance.

Here is a post which I wrote about a year back which is extremely relevant today.

Do you know you can do nothing after your death?

“No one here gets out alive.” Jim Morrison

Therefore, financial planning for your death must start when you are alive.

It may sound unkind, but death is the ultimate future of every living being. If you plan better it is good for your spouse, if you don’t, well, a hardship she will be subjected to will be huge.

Your casual and negligent approach in financial planning for death can be the cause of;

  • Hardship for the spouse – more paperwork, follow up
  • Misappropriation of assets – Non-documented and not informed gets misappropriated
  • Litigation – Non-documented and No Will
  • Delays – Non-compliant, litigation
  • Mental Stress – Dealing with the situations
  • Spoiled Relationships – Litigation, untrustworthy people around

Imagine the plight of your spouse when she is already subjected to massive emotional low due to the death of a loving husband.

Financial Planning is not only about how much life insurance you need (Of course you need an adequate term plan). It is also about how you plan your assets get transferred to the beneficiary easily after you die.

Here is a list of things you should keep in place for a smooth transition of your wealth to your loved ones.

  • Joint Name:

Always have a practice of investing in joint name with your spouse.  (You may assess the risk of divorce, trust, and claim, etc.) Joint names and operation mode as either-or survivor ease the after-death investment liquidation procedures.

  • Investments KYC Compliant:

Keep all your investments in mutual funds, shares, banks fixed deposits, post office, life insurance up-to-date KYC compliant.

Non-KYC compliant investments will entail a procedure, delays, and frustration.

  • Nomination

This is very important. All your investments should have the names of Nominees.

This eases the process of investment liquidation and transfer of assets after the death of the owner. All investments without names of a nominee, require executed Will to get the investment liquidated/transferred. This prolongs the process.

  • Updated Bank Details

Many time investments are made years ago, and the bank account mentioned in the form has changed.  Check all your investments and insurance policies to update the bank accounts details.

  • Will

This is an important document mostly ignored.

This enables thoughtful wealth distribution when you are alive. After your death, Will helps in avoiding litigation and hardship.

Will is a document where all your assets are mentioned so chances of misappropriation or ignorance reduce.

A couple must discuss about the wealth distribution. They should discuss both the scenarios 1) After anyone dies and 2) after both die.  A thought process must be exchanged between them.

Handpicked related post: Why You Need to Make a Will?

  • Financial Documents:

Keep all your financial documents like property agreements, balance sheet, income tax papers, investment details, DMat and bank account details, Fixed deposits, other non-DMAT investment certificates, life, and health insurance policies, vehicle RC book, original PAN and Aadhar Cards, Passport, etc. handy and within the knowledge of your spouse.

At least have copies of these documents with the spouse.

  • Loans:

All loans taken and given should be informed to the spouse.

Its tenure, interest rate, repayment terms, assets mortgaged, original sanction letter, name, and address of private loans, must be documented and informed to the spouse.

  • Online Passwords:

Most of the financial transactions done these days are online. Share with your spouse user IDs and password of all your online bank accounts, DMAT accounts, credit cards, other payment gateways like PayTM, UPI, etc.

If you deal with e-commerce business on sites like Amazon, Flipkart informs the process and login ID – password to your spouse.

  • Business Interest

All your business interest i.e. share in a partnership firm, proprietary business, directorship, and shares in private companies must be documented and informed to the spouse.

“Most people fail to realize that in life, it’s not how much money you make, it’s how much money you keep.” Robert T. Kiyosaki, Rich Dad, Poor Dad

  • Important People

Make a list with contact details of important professionals like CA, Investment Advisor, lawyer, insurance advisor, and close family member to approach for professional guidance.

In short, it is pertinent to make your spouse financially literate about your financial affairs.

If you think you are too young to die, make your spouse’s financial literacy your immediate agenda. Discuss and inform all your financial decisions and actions with her. Let her know what you own and owe. Keep all the financial documents at a place known to her.

If you have crossed your 50s, the above aspects must assume your immediate priority. Remember you have spent your prime time of life earning these assets. Make sure your spouse does not suffer due to your negligence and of her ignorance.  Remember you have bartered money for your life.

Plan to give your wife the ease of living after your death, make her financially literate, make her aware of all your personal finances.

“If being a kid is about learning how to live, then being a grown-up is about learning how to die.”  Stephen King

If you are a wife and do not know anything mentioned above, empower yourself to make yourself financially literate about your own finances. Ask your husband to act Today.

Watch this one-hour eye opener video on Financial Literacy for Women by a leading Financial Journalist Sucheta Dalal. (Must watch)

This is important & it won’t go waste, as even if you survive Corona, no one survives the inevitable, i.e. death.

Stay safe, stay secure, stay aware.

 

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